The DisUnited States: Implementing the Clean Power Plan

The massive feedback on the proposed EPA carbon pollution regulations is working its way through the EPA process, electric utilities, industry reliability councils, state and federal courts, state legislative bodies, and industry organizations.

Attention on impacts from the CPP impacts is shifting from the federal rules to evolving state-specific impacts. The massive feedback on the proposed EPA carbon pollution regulations is working its way through the EPA process, electric utilities, industry reliability councils, state and federal courts, state legislative bodies, and industry organizations. As the fallout continues, state regulators are increasing their local dialogues to understand the ramifications and limits of state-level plans and activities. These dialogues are moving from initial reactions around state-level carbon pollution to consideration of specific state strategies. Actual plans are not due for another few years, and the activities considered by states are varied and complex, as future plans are viewed in light of legacy and existing regulatory oversight.

Interestingly, a straightforward national goal for reducing carbon pollution from power plants will result in a complex mix of at least 51 different jurisdictional interpretations, multiple regional transmission organizations (RTOs), independent system operators (ISOs), and reliability council plans, and the potential for separate and independent regional economic and market-driven programs. Each of these plans will make varying use of the “building blocks” offered by the EPA as well as new approaches and tools including multi-state adoption. The resulting outcomes will be difficult to compare and utilities operating in multiple states will develop a shifting portfolio of compliance plans and strategies. These results force a further balkanization of environmental and economic policies and provide a dis-United States set of plans and activities that will have “generational” impacts far beyond those envisioned by the original proposal.

In addition to the variance and scope of these individual approaches, the CPP forces collaboration from two-state agencies that typically address their legislative mandates from different perspectives. State environmental agencies typically enforce federal rules and limits, with most environmental state agencies designed for enforcement and fining activities – very prescriptive and independent functions. Utility and energy regulatory agencies, on the other hand, are designed to derive, discuss, debate, implement, and compromise on energy policies, economic impacts, and system reliability – balancing a broad spectrum of stakeholder interests. Combining these two agency approaches in the midst of widely varying state and industry choices is challenging.

Caught in the middle of these debates are customers and businesses. State customer advocates will now expand their reach across the pricing and services sectors to include perspectives on environmental policy and impacts. At best, most residential customers will see modest impacts on their monthly bills. However, the ramifications of the building blocks of cleaner energy and reduced consumption will vary widely at the commercial and industrial customer levels. Economics of new manufacturing plant investments, new technology investments, and new workforce investments are even more complicated for multi-state companies.

The light at the end of this tunnel must rely on collaborative and patient stakeholder engagement and management processes. Utilities and customers must take leading roles in the state dialogues to force the appropriate considerations and tradeoffs. Without a significant outreach and education effort by utilities and customers, a massive collaboration and unification effort by state agencies, and a ubiquitous and compelling environment of compromise, the results of this DisUnited States of carbon abatement will not be equal, will not be fair, and will not produce balanced solutions to life, liberty, and the pursuit of happiness.